In Excessive Fee and Fiduciary Investment Litigation Against Georgetown University, District Court Must Consider Participants’ Request for Leave to File Amended Complaint

Participants in the Georgetown University retirement plans who brought individual and representative class action ERISA breach of fiduciary duty claims against the University for alleged payment of excessive fees and underperforming investment options may get a second bite at the apple. In Wilcox v. Georgetown Univ., No. 19-7065, __F.3d__, 2021 WL 446126 (D.C. Cir. Feb. 9, 2021), the D.C. Circuit Court of Appeals found that the district court erred by treating its order dismissing Appellants’ complaint as a final judgment and declining to consider a motion for leave to amend the complaint under Federal Rule of Civil Procedure 15(a).

On January 8, 2019, the district court dismissed the complaint without prejudice and noted on the electronic docket entry that “This case is closed.” On February 7, 2019, pursuant to Federal Rule of Civil Procedure 15(a), Appellants moved for leave to amend their complaint, attaching a proposed amended complaint. On May 29, 2019, the district court denied the motion on the basis that its order in January had entered judgment in the case and they could no longer seek leave to amend under Rule 15(a). It also determined that Appellants did not meet the standards under Federal Rules of Civil Procedure 59(e) or 60(b). “[T]he jurisdictional and the merits issues turn on whether the January dismissal order constituted a final judgment. If it did, then this court lacks jurisdiction over the untimely appeal. If it did not, then this court has jurisdiction over the timely appeal, and the district court erred by relying on its January dismissal in rejecting appellants’ attempt to amend their complaint.”

The court concluded that the January dismissal order did not constitute a final judgment. Where a district court’s order states that it is dismissing the complaint without prejudice, that can be a final decision if there are other sufficiently clear record indicia that it intended to dismiss the case or action. The court found that there is no such indicia in the record that the district court had withdrawn from the case as a whole such that a Rule 15(a) amendment would not be available. Specifically, the district court did not state in the January Order or memorandum opinion that amendment of the complaint would be futile; the Order did not state that it was final and appealable; the memorandum opinion did not state that “the case” or “the action” was dismissed; the Order did not state that it was dismissing all of the plaintiffs’ “claims;” the dismissal was not wholly for lack of subject-matter jurisdiction, and the University’s motion did not request dismissal of the “action.”

The University argued that the January Order was a final decision because “(1) it dismissed the complaint in full, leaving no claim unaddressed, (2) the electronic docket entry for the Order stated ‘this case is closed,’ (3) the January memorandum opinion expressed skepticism towards appellants’ overall theory, and (4) the May memorandum opinion stated that the district court had dismissed the action in its January Order, thereby disassociating itself from appellants’ case.” The court considered and did not find any of these arguments availing. The court vacated the denial of Appellants’ motion for leave to amend their complaint and remanded the case to the district court to consider whether to grant leave for Appellants to file their proposed amended complaint. Judge Randolph dissented.